While a holiday week is not necessarily the best precursor for a stock, Apple’s shares need to hold this level otherwise they could shift down to around $525 where it built a nice base from late October through most of November. However if the shares stay above $540 and the company reports results above expectations, which I believe it could, the shares could move towards $600. Breaking above it will probably be determined by the March quarter guidance.

Source: StockCharts.com

Apple should report its December quarter results around January 21 or 22.

Apple’s revenue guidance is $55 to $58 billion and the eight sell-side analysts I am tracking range from $55.9 to $58.6 billion with most clustered around $58 billion. Their EPS estimates range from $13.49 to $14.49 with three of them between $14.31 and $14.34. My revenue and EPS estimates from early November were $57.5 billion and $14.05, respectively, and while I haven’t finalized my projections it looks like revenue could be just above $60 billion with EPS around $14.75 with the iPhone and iPad performing better than expected. This would be the first quarter since last years December quarter that Apple has generated EPS growth.

The challenge with determining March quarter guidance is that China Telecom and China Unicom had the iPhone 5c and 5s available in September vs. typically getting new iPhones in the March quarter. Off setting this to some degree, if not totally, will be China Mobile partnering with Apple for the first time. Apple's actual gross margin and guidance will also be critical as they will provide some indication of any pricing pressures.

Cash should continue to grow which makes the valuation that much lower

Apple had $143 in net cash per share at the end of September and depending on how much stock the company bought in the quarter it could be around $150 per share as of the end of 2013.

With expectations that the company could earn about $44 in fiscal 2014 the shares have a 12.3x PE multiple. Depending on how you treat the overseas cash and how much the company needs to run its business and have assets to buy companies the shares are trading around a 10x PE multiple ex-cash.